distribution

The shrink mark: issues and prevention

The shrink factor (DI) reflects the difference between the sales revenue that the company should have received (based on inventory inventory and purchases) and the amount actually collected.

The DI is shown as a percentage of turnover and is the cost of stolen, missing or broken products.

It is distinguished from known shrinkage, which represents goods that are no longer in stock for identified and recorded reasons. Example: a case that has been reported.

THE UNKNOWN STATE: A LOST TO WIN

Several causes can explain the difference between the theoretical stock (which results from the product of the sales) and the real inventory: losses, supplier frauds, inventory errors, cash errors, breakage, shoplifting or internal … a shortfall for companies that have their break-even point impacted.

According to the barometer of theft in commerce and distribution over the period 2014-2015 conducted by Checkpoint, in France the total cost of crime / theft 1 is 1.94% of turnover and generates 8.5 billion euros of losses. A non-negotiable loss in full price war.

The study also reveals that theft is the cause of more than 3/4 shrinkage unknown, including a significant portion of internal flights, often more complicated to detect and prevent.

groupe sgp uncategorized démarque inconnue france

Unknown make-up in France – by source, 2014-2015
Source: Checkpoint Systems

INVESTING TO PREVENT UNKNOWN START

Efforts have been made by the banners to fight against shrinkage, and the results are felt. In France, between 2014 and 2015, it amounted to 0.81% of the total turnover of the sector against 1.09% in 2013-2014.

During the period studied, French distributors invest more than the European and global average in the prevention of losses (1.36% of the total turnover of the sector in France against respectively 1.07% and 1.19%). Signs are now reaping the fruits of their years of work. The synergy between the security agents, the investment in the new technologies typical surveillance cameras that observe and record, the control of alarms and other preventive solutions (examples: cerclages around the products, RFID tag …) made it possible to limit the cost of the DI. Especially since manufacturers are increasingly involved in this cause and offer products already equipped with antitheft.

HOW TO PREVENT FLIGHTS IN TOMORROW STORES?

In the face of increased competition from e-commerce, retailers, in the midst of a managerial shift with the arrival of automated cash registers, are more than ever compelled to reinvent themselves and change their business model to focus more on the customer experience.

Therefore, in a sector that must strongly guard against theft, how to reconcile “the merchant spirit” and “security spirit” in stores? This is the dilemma of the retail sector. Do the signs have to “trust” like some hotels where the customer pays what he says he has consumed or reconcile a security service that is both welcoming to the public and firm with delinquency …?

Because the customer experience is central to the development of the stores of tomorrow, at SGP, we instill in our agents the importance of having a commercial spirit while combining a firmness with the unscrupulous customers, to allow the quality of the welcome and guarantee a sense of security.

“In our job, we must know how to remain calm, be open to discussion to defuse potential conflicts, and especially have the character to be able to impose if necessary. “

Frédéric, security agent in a shop

“You must not be nervous, always be positive. Be understanding with customers too, knowing how to find an arrangement to defuse conflicts. Keep smiling and not fix customers, they do not like that. And above all, stay motivated and vigilant! “

Bassem, security agent in a shop

“Faced with customers, communication is the key, nothing serves to get excited, better opt for mediation! I think you have to know how to be discreet, listening to others, reactive. Knowing how to manage a conflict is important. “

Stéphane, security agent in a shop

It is in this state of mind that mass distribution will succeed in keeping its customers while managing to reduce the DI, so expensive for the sector.

1 The “cost of crime / theft” takes into account the cost borne by distributors due to shrinkage from shoplifting, internal theft, supplier fraud, losses.

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